The desire to drive members to their own networks is motivating healthcare provider organizations to enter the self-funded market, according to a recent survey among key brokerage firms conducted by RGA’s U.S. Group Reinsurance Healthcare Turnkey (HCTK) business line.
The survey results validate a growing momentum and substantial opportunity in the next year and beyond for self-funded products with providers looking to seize the opportunity to keep members in network with their own self-funded products.
According to the brokers surveyed, there is a very strong level of interest in offering self-funded products among their provider clients in the near term. This confirms what RGA has seen over recent months: There is a growing desire among healthcare providers to offer a self-funded product and a growing need for support services to help make the transition to self-funding possible.
The survey reveals that nine out of 10 brokers have provider clients asking about self-funded products, and 78% have provider clients interested in offering self-funded products.
Over the next four to six months, one quarter of provider clients are looking to pursue self-funded products, and the majority of providers (63%) are looking to pursue self-funding products in six months or beyond.
While providers are motivated by the market growth opportunity, entering the self-funded market is not without challenges. Brokers identified the following as the main challenges faced by provider clients wanting to enter the self-funded market:
- Distribution and distribution support were selected as the top challenges by a considerable margin.
- Understanding of self-funding and competitive employer stop loss (ESL) rates tied for the second and third biggest challenges, underscoring a need and opportunity for education and training.
- The need for a dedicated stop loss partner ranked as the fourth biggest challenge.
In order to successfully enter the self-funded market and seize the opportunity ahead, providers will benefit from a strategic partner to help with distribution and distribution support. Furthermore, having a dedicated stop loss partner to build capabilities and capacity can help providers overcome barriers to entry, and reap the benefits of the growing market.
To learn more about RGA’s Healthcare Turnkey solutions, designed to assist health plans, insurance companies, and providers in offering self-funded services and stop loss insurance to their employer groups, please contact us.